What is classed as general insurance for stamp duty purpose?
General insurance is not defined in the Act, but is any insurance that is not life insurance (and includes personal accident insurance). A “general insurer” means an insurer who carries on insurance business in respect of insurance that is not life insurance.
When must the Statement be lodged?
A General Insurer is required to lodge a monthly Statement providing details of all general insurance premiums in the previous calendar month and pay stamp duty at the rate of 11% of premium subject to duty.
Calculate stamp duty on general insurance.
The Statement and duty payable is required to be lodged with RevenueSA by the 15th day of the following month - for example, the July Statement must be lodged by 15 August. The Statement is lodged on RevenueSA Online by an authorised user.
If no stamp duty is payable, a 'Nil' Statement must still be completed and lodged. Lodging a 'Nil' Statement will avoid the Commissioner issuing an estimated assessment, inclusive of interest and penalty tax.
Interest and penalty tax are charged on the late lodgement / payment or non-lodgement of a Statement (refer to Ruling TAA001 for further information). A maximum court imposed penalty of $10,000 may apply for the offence of a failure or refusal to lodge a Statement.
What premiums are subject to stamp duty?
Premiums subject to stamp duty are:
- premium received in the previous calendar month;
- premium credited to an account of the insurer (but not received by the insurer) in the previous calendar month that the insurer chooses to include; and
- premium credited to account more than 12 months ago, that has not been received, and has not been included in a Statement in that preceding 12 months (as long as the policy has not been cancelled on the basis of not coming into legal effect),
with any exemption, allowable deduction and refund to then be taken into account.
“Premium” means an amount paid or payable for insurance and includes:
- an amount charged to a policy holder to reimburse, offset or defray the insurer's liability for GST in respect of the insurance; and
- a levy charged to a policy holder; and
- an instalment of premium; and
- a part of a premium.
Premium for the above purposes includes:
- premium that is not for life insurance;
- premium for a rider attached to a life policy that is not a contingency that is dependent on the duration of human life of the insured (for example, income protection insurance attached to a life policy);
- premium for a rider attached to a life policy that is insurance in respect of trauma or a disabling or incapacitating injury, sickness, condition or disease; and
- premium for personal accident insurance attached to a life policy where the principal place of residence of the insured was in South Australia at the time the policy providing the insurance was issued.
Premium for the above purposes excludes:
- premium received in the month that the insurer chose to include in a previous Statement as premium credited to an account of the insurer at that time but not received by the insurer at that time;
- personal accident insurance attached to a life policy where the principal place of residence of the insured was not in South Australia at the time the policy providing the insurance was issued; and
- premium for an insurance risk outside South Australia (with the exception that premium for personal accident insurance (for a risk outside South Australia) attached to a life policy where the principal place of residence of the insured was in South Australia at the time the policy providing the insurance was issued cannot be excluded).
Further, premium for the above purposes also excludes any stamp duty the insurer may have received from a policy holder when payment for the policy was made.
Premium for an insurance risk that is outside of South Australia (except for personal accident insurance as mentioned above) should be returned to the State Revenue Office of the Australian jurisdiction in which the risk is located. If the risk is partly in South Australia and partly in another jurisdiction, a General Insurance Apportionment Schedule is available to assist with apportionment of the risk across jurisdictions.
Class of insurance | Agreed basis of apportionment |
---|---|
Aviation Hull, Aviation Hull Third Party Property Liability and Aviation Hull Personal Liability | Where the aircraft, the subject of the insurance, is a high capacity regular public transport aircraft, apportioned on the basis of actual take-offs and landings in the previous year in each jurisdiction of all aircraft covered by the policy.
Where the aircraft, the subject of the insurance, is other than a high capacity regular public transport aircraft, jurisdiction of usual hangering of the insured property or location of the insured property. Notes
Note: This definition is contained in regulations made under the Civil Aviation Act 1988 (Statutory Rule 294 of 1994). |
Baggage | See travel. |
Bankers Blanket Policy | Apportioned according to the individual policy types outlined in this schedule. |
Blood Stock | Place of (usual) location of the asset. |
Boiler Explosion | Asset value/sum insured or exposure level for each jurisdiction. |
Burglary | Asset value/sum insured or exposure level for each jurisdiction. |
Business Interruption | Reasonably estimated profit revenue, fees, rent or other business measurement factor. |
Care Custody and Control of Blood Stock | Place of (usual) location of the asset. |
Cash in Transit | Number of premises.
Asset value/sum insured or exposure level for each jurisdiction. |
Company Reimbursement | Salaries and wages, number of people/employees. |
Comprehensive Crime Policy | Salaries and wages, number of people/employees. |
Contract Works | Asset value/sum insured or exposure level for each jurisdiction. |
Contractor Risks | Asset value/sum insured or exposure level for each jurisdiction. |
Crop | Asset value/sum insured or exposure level for each jurisdiction. |
Deterioration of Stock | Asset value/sum insured or exposure level for each jurisdiction. |
Disability – Single | Place of residence of the insured/place of registration of business. |
Disability – Group | Place of residence of the insured/place of registration of business. |
Directors & Officers | Turnover or sales or number of people. |
Fidelity Guarantee | Salaries and wages, number of people/employees. |
Fire | Asset value/sum insured or exposure level for each jurisdiction. |
General Property | Asset value/sum insured or exposure level for each jurisdiction. |
Home Building and Contents | Asset value/sum insured or exposure level for each jurisdiction. |
Industrial Special Risk Section – 1 Property | Asset value/sum insured or exposure level for each jurisdiction. |
Industrial Special Risk Section – 2 Consequential loss | Reasonably estimated profit revenue, fees, rent or other business measurement factor. |
Legal expense insurance | Salaries and wages, number of people/employees. |
Livestock | Place of (usual) location of asset. |
Loss of Profits | Reasonably estimated profit revenue, fees, rent or other business measurement factor. |
Machinery Breakdown (including computers and engineering) | Asset value/sum insured or limit of liability declared in each jurisdiction. |
Marine – Builders Risk | Asset value/sum insured or exposure level for each jurisdiction. |
Marine – Carrier’s Legal Liability - Coastal and international shipping | Predominant location. |
Marine – Charterer’s Liability - Coastal and international shipping | Predominant location. |
Marine – Hull Liability - Coastal and international shipping | Predominant location. Notes
The apportionment for coastal and international shipping is determined, regardless of the GMT of the vessel, based on the ‘predominant location’ of the vessel as defined below:
Note: Section 24 of the Marine Insurance Act 1909 (CW) requires the Insured to inform the Insurer or every material circumstances known by the Insured at the time insurance is obtained. |
Marine Private Pleasure | Place of registration or place of residence of the insured. |
Money | Number of premises.
Asset value/sum insured or exposure level for each jurisdiction. |
Mortgage Insurance | Apportionment is based on the location of the property secured. If the security consists of two or more properties that are located in different jurisdictions, the apportionment will be based on a value basis. |
Motor Vehicle (private use) and Extended Warranty for Private Use Vehicles | Apportionment based on normal place of garaging of the vehicle. |
Motor Vehicle or Extended Warranty – Commercial | Place of registration or deemed registration. |
Motor Vehicle or Extended Warranty – Unregistered | Place of (usual) location of asset – garaging. |
Motor Vehicle or Extended Warranty – Fed. Interstate | Place of registration or deemed registration. |
Occupational (Professional Indemnity) | Salaries and wages, number of people/employees.
Estimated profit, fees, rent, revenue etc |
Personal Accident and Illness – Group | Place of residence of the insured/place of registration of business. |
Personal Accident and Illness – Single | Place of residence of the insured/place of registration of business. |
Personal Liability | State of registration of business or place of residence of the person insured. |
Personal Property | Asset value/sum insured or exposure level for each jurisdiction. |
Pluvius | Asset value/sum insured or exposure level for each jurisdiction. |
Public Liability or Product Liability or Broadform | Salaries and wages, number of people/employees. Turnover or sales. Number of premises.
Floor area units or rent by State of risk.
Number of members of the organisation in each jurisdiction. |
Railway-property | Proportion of kilometres travelled by the rolling stock in each jurisdiction in the previous year. |
Railway-public liability | Proportion of kilometres travelled by the rolling stock in each jurisdiction in the previous year. |
Sprinkler Leakage | Asset value/sum insured or exposure level for each jurisdiction. |
Strata Unit | Asset value/sum insured or exposure level for each jurisdiction. |
Title Insurance | Location of the property. |
Trade Credit | Turnover or sales. |
Travel (outbound from Australia) – includes baggage | Duty payable on 10% of premium received. State of Registration of Business (where the Insured is not a natural person) or place of residence of the person insured.
Note: Should an insurance company disagree with this basis of apportionment they may apply to the Commissioner for apportionment on another basis. Where an insurance company elects to apportion duty on some other basis that method of apportionment must be applied consistently across all jurisdictions. |
Travel (within Australia) | Place of residence of the person insured or state of registration of the business (where the Insured is not a natural person). |
What premiums are exempt from stamp duty?
Premium exempt from duty is:
- A premium received or charged in respect of reinsurance.
Note: an insurer that takes on the initial risk can no longer claim an exemption where a risk (or a portion of that risk) is reinsured, and therefore must include that premium as premium subject to duty (unless an exemption or deduction were to apply). If the reinsurer is registered within South Australia, the reinsurer can now claim the reinsured risk as exempt premium.
- A premium received or charged under a private guarantee fidelity insurance scheme promoted amongst and sustained solely for the benefit of the officers and servants of a particular public department, company, person or firm and not extended, either directly or indirectly, beyond such officers and servants;
- A premium received or charged under a private guarantee insurance scheme promoted amongst and sustained solely for the benefit of the officers and members of a friendly society or branch thereof and not extended, either directly or indirectly, beyond such officers and members.
- A premium received or charged under a policy or workers compensation insurance where the premium or portion is referable to insurance against liability to pay workers compensation in respect of workers under the age of 25 years.
- A premium received or charged under a policy of insurance by a body registered under Part 4-3 of the Private Health Insurance Act 2007 of the Commonwealth where the premium is referable to insurance against medical, dental or hospital expenses.
- A premium received or charged in respect of the insurance of the hull of a marine craft used primarily for commercial purposes or in respect of the insurance of goods carried by railway, road, air or sea or of the freight on such goods.
- A premium received or charged in respect of insurance covering the total or partial loss of crops resulting from drought, whether or not this insurance also covers loss resulting from other perils (multi-peril crop insurance). If the policy does not include drought the premium will not be exempt. The exemption can only be claimed on new policies or renewals with an inception date of 1 January 2018 or later.
Does GST form part of the premium subject to duty?
Stamp duty is calculated on the GST inclusive value of a premium.
Find out more about the GST provisions in Information Circular No. 22.
What happens when the premium has been refunded/policy is cancelled?
A deduction can be claimed for premium credited to an account of an insurer but not received by the insurer at the time the policy is cancelled, where stamp duty has previously been paid on a premium, or where the premium is included as ‘gross’ premium in the Statement of the same month.
Where the deduction exceeds the net premium, duty on the exceeded amount is taken to be an overpayment of tax pursuant to Section 41 of the Act and the Statement is treated as an application for refund pursuant to Part 4 of the Taxation Administration Act 1996.
The following examples relate to insurers who bear the liability for stamp duty. The examples do not cover every situation that may apply, so insurers can seek clarification in writing from RevenueSA of how to account for premium / claim a deduction in a particular situation.
A refund can also be claimed by an insured / lodging party in relation to South Australian property / risk insured outside South Australia (although these examples do not relate to that situation).
Example 1
Premium Refunded to a Policy Holder
Policy issued on day 1 of month 1 for a full year; $100 premium (and $11 stamp duty) received by insurer in that month and included in the Statement for that month, and $11 stamp duty paid.
On the last day of month 6, the policy is cancelled by the policy holder.
Premium of $50 and stamp duty of $5.50 refunded to policy holder in month 7.
Insurer can claim a deduction for the $50 refunded premium in the Statement for month 7.
This Example 1 also applies where the premium was:
- credited to an account of the insurer in month 1, not received in month 1 but the insurer chose to include the premium in the Statement for month 1;
- credited to an account of the insurer in month 1, not received in month 1 but the insurer chose not to include the premium in the Statement for month 1, but was included in the Statement for month 2 (as premium received in month 2).
Further, premium refunded to a policy holder could also arise where during the policy year the insured reduces the value of the insured risk, such that premium (and stamp duty) is refunded to account for a continuing lower risk.
Example 2
Premium credited to an account of an insurer but not received by the insurer at the time the policy is cancelled
Policy issued on day 1 of month 1 for a full year; no premium (or $11 stamp duty) is received in that month, but premium of $100 is credited to an account of the insurer in that month and the insurer chose to include the premium in the Statement for month 1, and $11 stamp duty paid.
The insurer attempts to obtain the premium from the insured, but no payment is received over the following months.
In month 3 the insurer cancels the policy with effect from day 1, on the basis of the policy not coming into legal effect.
Insurer can claim a deduction for the $100 non-received premium in the Statement for month 3.
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